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Here's an excerpt from The Modem Reference, written by Michael A. Banks
and recommended by Jerry Pournelle in Byte, The Smithsonian  Magazine,
et al. The right to reproduce this article is granted on the condition 
that all text, including this notice and the notice at the end of the
article, remain unchanged, and that no text is added to the  body of
the article. Thanks!  --MB

BITS, BAUD RATE, AND BPS
Taking the Mystery Out of Modem Speeds
by Michael A. Banks
 (Copyright, 1988, 1990, Michael A. Banks.  All rights reserved.)
 

Bits per second (bps) Bits per second is a measure of the number of
data bits (digital 0's and 1's) transmitted each second in a
communications channel.  This is sometimes referred to as "bit rate."
Individual characters (letters, numbers, etc.), also referred to as
bytes, are composed of several bits. While a modem's bit rate is tied
to its baud rate, the two are not the same, as explained below.

Baud rate Baud rate is a measure of the number of times per second a
signal in a communications channel varies, or makes a transition
between states (states being frequencies, voltage levels, or phase
angles).  One baud is one such change.  Thus, a 300-baud modem's signal
changes state 300 times each second, while a 600-baud modem's signal
changes state 600 times per second.  This does not necessarily mean
that a 300-baud and a 600-baud modem transmit 300 and 600 bits per
second, as you'll learn in a few lines.

Determining bits per second Depending on the modulation technique used,
a modem can transmit one bit--or more or less than one bit--with each
baud, or change in state.  Or, to put it another way, one change of
state can transmit one bit--or more or less than one bit. As I
mentioned earlier, the number of bits a modem transmits per second is
directly related to the number of bauds that occur each second, but the
numbers are not necessarily the same. To illustrate this, first
consider a modem with a baud rate of 300, using a transmission
technique called FSK (Frequency Shift Keying, in which four different
frequencies are turned on and off to represent digital 0 and 1 signals
from both modems).  When FSK is used, each baud (which is, a gain, a
change in state) transmits one bit; only one change in state is
required to send a  bit.  Thus, the modem's bps rate is also 300:

300 bauds per second X 1 bit per baud  =  300 bps

Similarly, if a modem operating at 1200 baud were to use one change in
state to send each bit, that modem's bps rate would be 1200.  (There
are no 1200 baud modems, by the way; remember that.  This is only a
demonstrative and hypothetical example.) Now, consider a hypothetical
300-baud modem using a modulation technique that requires two changes
in state to send one bit, which can also be viewed as 1/2 bit per baud.
 Such a modem's bps rate would be 150 bps:

300 bauds per second X 1/2 baud per bit  =  150 bps

To look at it another way, bits per second can also be obtained by
dividing the modem's baud rate by the number of changes in state, or
bauds, required to send one bit:
 
         300 baud
      ---------------  =  150 bps
      2 bauds per bit
 
Now let's move away from the hypothetical and into reality, as it exists
in the world of modulation. First, lest you be misled into thinking
that "any 1200 baud modem" should be able to operate at 2400 bps with a
two-bits-per-baud modulation technique, remember that I said there are
no 1200 baud modems.  Medium- and high-speed modems use baud rates that
are lower than their bps rates.  Along with this, however, they use
multiple-state modulation to send more than one bit per baud. For
example, 1200 bps modems that conform to the Bell 212A standard (which
includes most 1200 bps modems used in the U.S.) operate at 300 baud and
use a modulation technique called phase modulation that transmits four
bits per baud.  Such modems are capable of 1200 bps operation, but not
2400 bps because they are not 1200 baud modems; they use a baud rate of
300.  So:

      300 baud X 4 bits per baud  =  1200 bps
 
                                 or
 
           300 baud
      ------------------  =  1200 bps
       1/4 baud per bit
 
Similarly, 2400 bps modems that conform to the CCITT V.22 recommendation
(virtually all of them) actually use a baud rate of 600 when they
operate at 2400 bps.




However, they also use a modulation technique that transmits four bits per baud:
 
      600 baud X 4 bits per baud  =  2400 bps

                                  or
 
           600 baud
      ------------------  = 2400 bps
       1/4 baud per bit
 
Thus, a 1200-bps modem is not a 1200-baud modem, nor is a 2400-bps modem
a 2400-baud modem. Now let's take a look at 9600-bps modems.  Most of
these operate at 2400 baud, but (again) use a modulation technique that
yields four bits per baud.  Thus:

      2400 baud X 4 bits per baud  =  9600 bps
 
                                 or
 
           2400 baud
      ------------------  =  9600 bps
       1/4 baud per bit
 
 Characters per second (cps)
Characters per second is the number of characters (letters,  numbers,
spaces, and symbols) transmitted over a communications channel in one
second.  Cps is often the bottom line in rating data transmission
speed, and a more convenient way of thinking about data transfer than
baud- or bit-rate. Determining the number of characters transmitted per
second is easy: simply divide the bps rate by the number of bits per
character.  You must of course take into account the fact that more
than just the bits that make up the binary digit representing a
character are transmitted when a character is sent from one system to
another.  In fact, up to 10 bits may be transmitted for each character
during ASCII transfer, whether 7 or 8 data bits are used.  This is
because what are called start- and stop-bits are added to characters by
a sending system to enable the receiving system to determine which
groups of bits make up a character.  In addition, a system usually adds
a parity bit during 7-bit ASCII transmission.  (The computer's serial
port handles the addition of the extra bits, and all extra bits are
stripped out at the receiving end.) So, in asynchronous data
communication, the number of bits per character is usually 10 (either 7
data bits, plus a parity bit, plus a start bit and a stop bit, or 8
data bits plus a start bit and a stop bit).  Thus:

              300 bps
      -----------------------  =  30 characters per second
       10 bits per character
 
             1200 bps
      -----------------------  =  120 characters per second
       10 bits per character
 
             2400 bps
      -----------------------  =  240 characters per second
       10 bits per character
 
Common speeds The most commonly-used communications rates for dial-up
systems (BBSs and online services like CompuServe, DELPHI, and GEnie)
are 300, 1200, and 2400 bps.  A few older systems-- especially Telex
systems--communicate at 110 bps, but these are gradually going the way
of the dinosaur.  4800 and 9600 bps modems are generally available, but
few online services or BBSs accommodate them.  This will be changing in
the near future, however, with the cost of high-speed modem technology
decreasing as the demand for it increases. Modems with even higher bps
rates are manufactured (19,200 and up) but these are not used with
dial-up systems; the upper limit on asynchronous data transmission via
voice-grade telephone lines appears to be 9600 bps.  The use of higher
transmission rates requires special dedicated lines that are
"conditioned" (i.e., shielded from outside interference) as well as
expensive modulation and transmission equipment.

If you found this article useful, you may want to pick up a copy of the
book from which it was excerpted:

THE MODEM REFETHE MODEM REFERENCE
by Michael A. Banks
Published by Brady Books/Simon & Schuster

In addition to explaining the technical aspects of modem operation,
communications software, data links, and other  elements of computer
communications, the book provides detailed, illustrated "tours" of
major online services such as UNISON, CompuServe, DELPHI, BIX, Dow
Jones News/Retrieval, MCI Mail, the PRODIGY service, and others.  It
also contains information on  using packet switching networks and BBSs,
as well as dial-up  numbers for various networks and BBSs. You'll also
find hands-on guides to buying, setting up, using, and troubleshooting
computer communications hardware and software.  (And the book
"supports" all major microcomputer brands.)  THE MODEM REFERENCE is
available at your local B. Dalton's,  WaldenSoftware, Waldenbooks, or
other bookstore,  either in stock or by order.  Or, phone 800-624-0023
to order direct.

Want the lowdown on getting more out of your word processor?  Read the
only book on word processing written by writers, for writers: WORD
PROCESSING SECRETS FOR WRITERS, by Michael A. Banks & Ansen Dibel
(Writer's Digest Books).  WORD PROCESSING S Z OaG&:�xG WRITERS is
available at your local B. Dalton's, Waldenbooks, or other bookstore,
either in stock or by order.  Or, phone 800-543-4644 (800-551-0884 in
Ohio) to order direct.

Do you use DeskMate 3?  Are you getting the most out of the program?  To
find out, get a copy of GETTING THE MOST OUT OF DESKMATE 3, by Michael
A. Banks.  Published by Brady Books/Simon & Schuster, it is available
in your local Tandy/Radio Shack,  WaldenSoftware, or Waldenbooks store
now.  Or, phone 800-624-0023 to order direct.

                  Other books by Michael A. Banks
                  
 UNDERSTANDING FAX & E-MAIL (Howard W. Sams & Co.)ZA��>& F9ch Books)]X   
 [For more information, contact:]X   [Michael A. Banks]X   [P.O. Box 312]X   
 [Milford, OH  45150]X    a OE MAUSER: Movel; Baen Books)
 T PRICES (w/Mack Reynolds; SF novel; Baen Books)
 COUNTDOWN: THE COMPLETE GUIDE TO MODEL ROCKETRY (TAB Books)
 THE ROCKET BOOK (w/Robert Cannon; Prentice Hall Press)
 SECOND STAGE: ADVANCED MODEL ROCKETRY (Kalmbach Books)
     
      For more information, contact:
      
Michael A. Banks
P.O. Box 312
Milford, OH  45150